18 Ratios Flashcards
1
Q
Formula for current assets and acid test ratios
A
CA = current assets/current liabilities
AT = current assets - inventory/current liabilities
2
Q
Formula for gearing ratio
A
Non current liabilities/capital employed x100
3
Q
Formula for ROCE
A
operating profit /capital employed x100
4
Q
Define gearing
A
the ratio of a company’s loan capital to its share capital.
5
Q
Define window dressing
A
the legal adjusting of accounts by a business to present a financial picture that is to its benefit.
6
Q
Define performance ratios
A
illustrate the profitability of a business compared to other businesses
